Business essay (link to The Prince by Machivallie)

Applying Machiavelli’s Principles

The Coca-Cola Company

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Prepared for: Pavinee Kulsamrit (25) and Professor Beehler

Date of Completion:

Niccolò Machiavelli wrote The Prince in the 16th century as a plea to the Medicis - offering advice on how to rule. Although his principles were not immediately accepted, his ideas started to become appreciated after his death. Today, his ideas still hold virtue and merit in today’s society and can be applied to business practices that companies employ. The Coca-Cola Company has been in business for over 100 years, and is currently the industry leader in the non-alcoholic beverages and soft-drinks category. They are also ranked as the 3rd most valuable brand by Forbes. They have got to this position by continuously innovating new marketing techniques and ambitiously pursuing sales in every possible market. Despite the fact that this book was written centuries ago, a large degree of the company’s success can be attributed to Machiavelli’s transcendental ideas regarding the art of war, immoral justification, and dealing with unimportant minorities.

All of the success that the company has accumulated cannot be attributed solely to luck; the company has diligently maintained a profile that includes a commitment to excellence and maintaining dominance over competitors. Machiavelli’s ideas regarding war reveal how The Coca-Cola Company shrewdly and mercilessly continues to rank at the top of the industry as well as grow their company and revenue. Machiavelli states that “a prince ought to have no other aim or thought, nor select anything else for his study, than war and its rule and discipline” (Machiavelli, 67). In this application of Machiavelli, a comparison can be made between the art of war and competition in the industry. The goal of businesses should be to crush their competition, because businesses are lead by the dollar. Striving to be the best and prioritizing strategic plans against competitors allows successful companies such as The Coca-Cola Company to stay on top of the industry for so long. Their only concern should regard their revenue and how their products matches up with their competitors so that when something goes wrong, they can make plans to fix it. This also means that companies should push themselves to the limit and do whatever it takes to gain a competitive edge. The Coca-Cola Company’s drive to be the biggest global brand in this industry has caused some strife with competitors and countries. In 1998, PepsiCo filed an antitrust lawsuit against The Coca-Cola Company for “attempting to monopolize the market for fountain-dispensed soft drinks through independent foodservice distributors throughout the United States” to ensure “fair and open competition” (beverage-digest.com). The laws between what a monopoly is and is not has always been debated in the United States as the line is very vague. However, the judicial system found that in the end, PepsiCo had no merit in their argument and the practices that The Coca-Cola Company was employing was fair game. When a company is successful as The Coca-Cola Company, every competitor will want to take its place and do what it takes to steal their notoriety and fame. The Coca-Cola Company’s businesses practices over the past century represent the epitome of what Machiavelli preached regarding war, but in a competitive aspect. The difference between a mediocre company and an industry leader is their respective decisions and willingness to take risks. Machiavelli said that he “consider[s] that it is better to be adventurous than cautious” (Machiavelli 124). Staying overly cautious overtime will eventually lead to a state of mediocrity because without change, nothing will ever happen. The company found that it breached this imaginary, monopolistic line when in Europe, “The European Union reached a settlement Tuesday of its long-running antitrust case against Coca-Cola Co. under which the world’s biggest soft drink company agreed to change sales practices that helped it win roughly half the market in Europe” (Geitner). However, they should be applauded for the fact that they were able to be so successful that their efforts had to be restricted. The Coca-Cola Company is able to create incremental advantages over their competitors by continually taking risks over time that has allowed them to maintain their strong position in the marketplace.

In the business world, man is led to make decisions favoring economic advantages over moral stipulations. Machiavelli wrote that man is inherently led by evil, and although it is ideal to have good traits such as loyalty, truth, fairness, and justice - sometimes it is impossible to embody them at all times. Machiavelli wrote that “he who neglects what is done for what ought to be done, sooner effects his ruin than his preservation; for a man who wishes to act entirely up to his professions of virtue soon meets with what destroys him among so much that is evil” (Machiavelli, 71). In essence, he is saying that sometimes it is right to justify using immoral means as a way to achieve results. If the means achieves successful ends, the business should carry it out regardless of backlash. It may seem inhumane, but any potential backlash can be sorted out in the future by doing small deeds of good fortune. The Coca-Cola Company would not be the industry leader if it did not take liberties by cheating people, relationships, and cities along the way. For example, in 2003 there was a pesticide controversy surrounding the company in their business contacts in India. India’s Centre for Science and Environment (CSE) stated that their products “contained pesticides and insecticides in excess of the limits set by European Economic Commission (EEC)” (business-standard.com). Due to these allegations, their sales in India for that quarter declined nearly 11% after several quarters of incremental growth. An explanation for this sudden attack on the company can be linked to the cost of business. When doing business overseas, the company has a subtle reputation for not carrying out ethical practices. It is cheaper for the company to operate without having to deal with potential negative externalities such as the cost of pollution. However, due to their state as a monopolistic corporation, it is hard for even the host country to defend itself against the company’s economic driven mindset. This idea can be linked to Machiavelli’s principles that at the end of the day, man is inherently evil and selfish. For The Coca-Cola Company, this flaw can be seen as their principal motive has been and will always be to make as many sales as possible to increase revenue.

A company must be focused on the big picture and their main goals at all times because spending time on minute details will expend unnecessary energy and resources. There are reports of unethical business practices for the company regarding contaminated groundwater. This expands upon the issue of negative externalities. The company maintains a bottling factory in Plachimada, a city in India. However, after time, citizens affected by contamination of groundwater in the nearby, affected cities became hostile and started strikes against the company. Although the company sends a truckload of water to the two worst affected villages as a public display of help, this is not enough for these citizens who demand that the company “pay for restoring the damaged groundwater aquifers and for long-term water supply to all the impacted villages” (Jayaraman). Additionally, they blame their own government for considering this as an issue of political collusion as none of the congress members have publicly supported the citizens. Meanwhile, The Coca-Cola Company publicly commented on this situation as a non-issue. Finally, the government has not even checked the aquifer for contamination despite public outcry. This situation depicts many principles championed by Machiavelli. In chapter 3, he states that “A prince does not spend much on colonies, for with little or no expense he can send them out and keep them there, and he offends a minority only of the citizens from whom he takes lands and houses … and those whom he offends, remaining poor and scattered, are never able to injure him; whilst the rest being uninjured are easily kept quiet.” (Machiavelli, 7). First, the area of this factory offends only a ‘minority’ of India so there is little pressure for them to change their practices. In a bigger picture, India and The Coca-Cola Company share a mutually beneficial relationship and Plachimada is only one small pawn on the hypothetical chess board of the world. Additionally, the company is never going to be ‘injured’ by those citizens because they do not have enough power to make a stand. The company only has to do the bare-minimum of making a public relations statement to satisfy those who matter most to the company: shareholders of the company and business executives. By making a public comment to satisfy public relation demands, the true horrors and extremities of the situation are kept hidden. On top of that, those uninjured are “easily kept quiet” due to the business and political relationships that both sides want to maintain. Overall, this situation can be analyzed by looking at the significance of Plachimada in a global context. Any news of the mishandling of this area will most likely not make global news because it is not important or severe enough. Yes, it is still an ethical issue but in order to get ahead in life someone will win at the expense of others. The Coca-Cola Company’s merciless actions reveal that they are influenced by Machiavellian principles.

Businesses have evolved to a higher standard of ethics and regulations since Machiavelli wrote The Prince. Therefore, not all of the information is historically accurate and that can account for inaccuracies when applying the principles of Machiavelli to a company. For example, when Machiavelli wrote that a prince’s main study should revolve around war to rule his land, he was only concerned with himself and his subjects. In this day and age, however, businesses have to be concerned with more than their own entity and their employees. Every decision that they make will be judged by everyone who sees it. This includes potential consumers and customers. On top of that, businesses have to be wary about how their actions affect the environment. Additionally, some argue that it is no longer the duty of companies to solely be concerned with finances and making pure profit. Today, many companies are expected to give back to the community and develop methods of responsible sustainability and recycling. Businesses have to adapt and evolve over time to changing demands. Thus, The Coca-Cola Company does not follow completely follow Machiavellian principles because it has adapted to these new present day expectations. However, they use some of them as a strong foundation for their own principles.

Overall, it cannot be argued that using Machiavellian principles has been successful for The Coca-Cola Company given the fact that they are currently the industry leader and rate as a valuable brand. It is due to these principles that this company was able to reach its maximum potential by continuously innovating over time, beating competitors, and striving to be the best. Not every company can stay at the top of the industry forever. For example, Microsoft used to dominate PC sales but Apple has recently claimed that department. Although there is a myriad of factors to consider, The Coca-Cola Company’s principles allow them to dominate their competition and dominate the marketplace. If Machiavelli was alive today, he would consider this company as prototypical example of his principles due to their sustained level of success. Italy had leaders that fell victim to complacency which they unfairly blamed on bad luck. However, The Coca-Cola Company has the foresight to know that sometimes there are unsuccessful quarters, but as long as they stay true to their ideas and principles - success will come. With profits that continue to grow every year, the company will continue to carry out the principles of Machiavelli as it has served as a baseline for their overwhelming success. As Machiavelli would say, it is better to be feared and loved. As a society, we should fear the enigma this company could become if left unchecked by regulations, but love their products as we cannot live in a world without them.

Works Cited

"Coke Sales Fall 11% on Pesticide Controversy." Coke Sales Fall 11% on Pesticide Controversy. N.p., 29 Oct. 2003. Web. 15 Dec. 2014.

Geitner, Paul. "E.U., Coca-Cola Antitrust Case Over." Washington Post. The Washington Post, 20 Oct. 2004. Web. 15 Dec. 2014.

Jayaraman, Nityanad. "Global Policy Forum." Coca Cola Parches. N.p., 8 May 2002. Web. 15 Dec. 2014.

Machiavelli, Niccolò, W. K. Marriott, Nelle Fuller, and Thomas Hobbes. The Prince. Chicago: Encyclopædia Britannica, 1955. Print.

"Pepsi Sues Coke in Antitrust Action Over Fountain Business." Pepsi Sues Coke in Antitrust Action Over Fountain Business. Beverage Digest Special, 5 Sept. 1998. Web. 14 Dec. 2014.

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